May 16th, 2016

Daily Market Commentary

 

ECONOMIC NEWS:

  • The New York Manufacturing index was reported at -9.02, below an expected figure of 6.50.
  • The Rightmove House Price Index in the UK was up 0.4% and up 7.8% in month-over-month and year-over-year terms, respectively.
  • Retail Sales in China were up 10.1% in year-over-year terms, slightly below estimates.

Commodities:

  • Gold extended Friday’s gain, even as the dollar held steady, as investors increased holdings in exchange-traded funds for a 14th straight day, the longest buying streak since March 7.
  • Brent crude rose to a six-month high, leading a rebound in commodities and boosting the ruble and mining companies, as supply disruptions in Nigeria added to production woes.

Canada:

  • Canadian stocks rose to a one-week high as commodities producers rallied with the prices of resources from oil to industrial metals.
  • Infrastructure development and future price gains will increase Alberta’s oil production 78 percent to 5.4 million barrels a day by 2040, the National Energy board estimated Wednesday in a report outlining Canada’s energy future.

United States:

  • U.S. stock-index futures were little changed, after the S&P 500’s longest streak of weekly drops since January, signaling a lack of impetus for gains as a lackluster earnings season winds down.
  • The dollar held near a six-week high versus its major peers as improved economic data in the U.S. prompted speculation that a boost to interest rates this year, and possibly even as soon as next month, just became more likely.
  • Anacor Pharmaceuticals, Inc. today announced that they have entered into a definitive merger agreement under which Pfizer will acquire Anacor for $99.25 per Anacor share, in cash, for a total transaction value, net of cash, of approximately $5.2 billion, which assumes the conversion of Anacor’s outstanding convertible notes.
  • Raytheon Co.’s network of ground stations for the U.S. Air Force’s newest Global Positioning System satellites may cost at least $5.3 billion to develop, according to the service, a 56 percent increase from the original projection.

 

International:

  • European stocks declined after disappointing economic data from China, with trading volume down amid holidays across the region.
  • Mark Carney defended the Bank of England against critics furious at his warnings about the dangers posed by a European Union exit, and described the British economy as facing similar uncertainty to the early 1990s.
  • Telecom Italia SpA almost tripled its target for reducing expenses to 1.6 billion euros ($1.8 billion) by 2018 in a move pushed by new Chief Executive Officer Flavio Cattaneo, who aims to improve profitability at the former state-owned phone carrier. The shares rose the most in more than two weeks.
  • Royal Philips NV is seeking to raise as much as 970 million euros ($1.1 billion) from the initial public offering of a 25 percent stake in its lighting unit in Amsterdam after a private sale process didn’t result in a deal.
  • Asian stocks advanced on a day punctuated by broad swings, with Shanghai equities climbing back from an early loss amid disappointing economic data while Tokyo shares briefly erased a rally. China stocks trading in Hong Kong finished higher after being jolted by a sudden plunge.
  • The G7 meets this week in Japan, with speeches expected from U.S. Federal Reserve Chair Janet Yellen and IMF chief Christine Lagarde. A Chinese government-backed summit focuses on infrastructure financing in Asia.
  • India’s plan to add about 80 gigawatts of coal-fired power plants worth some $72 billion is unraveling because of insufficient electricity demand.

*All information is taken from Bloomberg, unless otherwise noted.